- Bitcoin has grown 6 million percent since its launch
- The digital currency could still be undervalued
As stores of value, many investors perceive gold and, more recently, bitcoin as second to none. Since 1971, gold has appreciated from $35 per ounce to around $1,300 at the time of this writing, a gain of over 3,500 percent. Bitcoins have done even better. On July 19, 2010, a bitcoin was worth $0.08. At the time of this writing, it’s priced close to $5,300 per bitcoin, a gain of over 6,000,000 percent in seven years. Not bad!
Whether gold and bitcoin really are stores of value is not universally accepted. Viewed from a fiat currency perspective, such as that of the U.S. dollar, bitcoin and gold are, to say the least, not without risk. Over the past 12 months, the annualized standard deviation of gold has been 12 percent. Gold had a 70 percent drawdown between 1980 and 1998. Compared to bitcoin, the gold market looks sleepy. Bitcoin owners experienced a 60 percent annualized standard deviation over the past 12 months and in the past, it has achieved a mind-boggling 175 percent annualized risk. Moreover, in its short life, it has already had drawdowns of 93 percent and 84 percent.
Drawdowns of such magnitude do sound crazy yet investors still allocate funds to other markets which have experienced large drawdowns. The U.S. equity market, which experienced an 89 percent drawdown between 1929 and 1933, from which it took until 1954 to recover. Since then, it has experienced a 47 percent drawdown in 1973-74, a 50 percent drawdown in 2000-2002 and a 60 percent drawdown from October 2007 to March 2009. Crude oil prices are currently 67 percent off their 2008 highs. The difference being, of course, that few investors would argue that stocks and crude oil are stores of value. Rather, investors perceive them as being risky investments.
However volatile they may be, the reason why gold and bitcoin are perceived as stores of value is simple: their money supply doesn’t grow quickly and, in the case of bitcoin not at all, some days. Both gold and bitcoin money supply growth is determined by mining output. Over the past half century, new gold mining supply has added anywhere from 1.1 to 2.4 percent to the existing stock of previously mined gold and gold prices tend to vary inversely with the degree of mining supply coming on line. This is much slower growth than the money supply of the U.S. dollar and credit. Even during the 14 years prior to the 2008 financial crisis, the Federal Reserve’s balance sheet, one of many proxies for the amount of money in the system, grew by 5.6 percent per annum. Since the fall of 2008, it has expanded by nearly 20 percent per year.
Bitcoin’s mining supply grew at an infinite pace in 2009 when the currency burst into existence. This year it will likely slow to around 4.2 percent and then drop to below 2 percent per year after 2020. Sometime around 2140, the last new bitcoin ever will be mined, bringing the total to 21 million. The bitcoin market anticipates this, hence the extraordinary bull market in the digital currency. This contrasts with gold, whose price has been depressed by 94 million new ounces coming onto the market each year.
Zhejiang Shuqin Technology Co., Ltd was founded on 2016, is a blockchain based R&D and application service provider. Core team started the research of cryptocurrency and non-currency blockchain applications since 2013, and have made certain effort on the aspects such as blockchain infrastructure, consensus algorithms, digital assets exchange, trustworthy electronic certificate, etc. Based on the practical experiences and team experts, Shuqin tech has discovered a new way for blockchain technology to be applied on real user cases. Shuqin tech has developed an open middle tier, by fusion up the technical advances for blockchain and overcome the capacity issue of public blockchain we provided a “Blockchain+” technical solutions, and established a trustworthy electronic certificate service platform – Baoquan.com.
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For enterprises, the following table are showing the main services.
For more detailed information, please contact email: js@baoquan.com
WHAT WE ARE SEEKING FOR:
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- Work on the most interesting and challenging problems in the Blockchain space.
- Be a part of a Blockchain team committed to the advancing technology
- Build reusable, modular code liaries for use across Blockchains product line.
- Work on an industry-leading product with big data.
- The foremost quality for this or any position at Blockchain is integrity.
- Experience working with Java, golang and relational databases.
- Thrive on learning new technologies and dont believe in one-size-fits-all solutions.
- Understand how all the pieces fit together (front-end, database, network layer, etc.) and how they impact the performance of your application.
- Familiar with IBM Hyerledger, Ethereum, siacoin or bitcoin.
- Strong attention to detail.
Our website：https://www.baoquan.com/?lang=en
Contact us: js@baoquan.com
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